The CCAAT/enhancer-binding protein β (C/EBPβ) regulates a variety of factors and cellular responses associated with pulmonary fibrosis. To distinguish its role in the mesenchyme from that in other compartments, the effects of mesenchymal-specific deletion of C/EBPβ on pulmonary fibrosis was examined. Crossing of mice with the floxed C/EBPβ gene with α2(I) collagen enhancer-CreER(T)-bearing mice successfully generated progeny with a conditional knockout (CKO) of C/EBPβ in collagen I-expressing (“mesenchymal”) cells only on treatment with tamoxifen (C/EBPβ CKO). When treated with an endotracheal bleomycin injection, C/EBPβ CKO mice showed significant attenuation of pulmonary fibrosis relative to control C/EBPβ-intact mice. C/EBPβ CKO mice also had reduced myofibroblasts in the lung. However, no significant differences in inflammatory/immune cell influx were noted in the mutant mice relative to the control mice. DNA microarray and real-time PCR analyses identified a series of myofibroblast differentiation regulators as novel target genes of C/EBPβ. Interestingly, C/EBPβ deficiency caused a marked induction of matrix metalloproteinase 12 expression, suggesting its potential role as a repressor, which could account for the noted reduction in fibrosis in the C/EBPβ-deficient mice. Thus, these findings indicate an essential role for C/EBPβ in the mesenchymal compartment in pulmonary fibrosis that is independent of its effects on inflammation or immune cell infiltration.